What is the Doctrine of Promissory Estoppel?

Why in News?

• While dismissing the petitions, the Supreme Court bench also rejected the argument that the 'doctrine of promissory estoppel' would apply and said that the decision to not proceed with the previous recruitment processes could not be termed as arbitrary.

• It observed that promissory estoppel will not apply when a larger public interest is involved. 

 About 'doctrine of promissory estoppel':

• What is it? It is a doctrine in contract law which enforces a promise whether executed as a contract or not.
• The doctrine seeks to protect the rights of a promisee or aggrieved party against the promisor.
• When is the doctrine applied?
  • A valid contract under law requires an agreement to be made with sufficient consideration. 
  • The doctrine applies when the promisor has made a promise to the promisee.
  • The promisee must have relied on the promise and suffered a loss due to the non-performance of the contract. 
  • The doctrine prevents the promisor or enterprise from going back on its word or promise.
  • The doctrine enables the injured party or the promisee to recover on a promise.
• Example:
  • A vendor makes an oral promise to the customer to replace the goods if they do not fit the customer's size requirements. 
  • The customer purchases the clothes and takes them home.
  • However, the customer proposes to return the clothes to the vendor relying on the vendor's oral promise. 
  • Here, the vendor is estopped from refusing the clothes returned.
• Thus, this doctrine seeks to enforce a promise made under a contract, whether oral or in writing.
• The doctrine varies from country to country.
• In a 1981 decision in Chhaganlal Keshavalal Mehta v. Patel Narandas Haribhai, the SC lists a checklist for when the doctrine can be applied.
  • First, there must be a clear and unambiguous promise.
  • Second, the plaintiff must have acted relying reasonably on that promise.
  • Third, the plaintiff must have suffered a loss.

 

---

Q1)  What is a Contract?

A contract is an agreement between parties, creating mutual obligations that are enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.

Source: BREAKING| Supreme Court Dismisses Plea To Complete Previous Recruitment Processes To Army & Air Force Which Were Cancelled After Agnipath Scheme